NEW YORK CITY—Both macroeconomic conditions and real estate fundamentals supported increases in office rents during 2014, and owners of class A space responded accordingly. Tenant effective rents—the average cost of occupancy for tenants—last year posted their biggest year-over-year gain in four years, Savills Studley says in its annual Savills Effective Rent Index report.

All of the CBD and suburban markets covered in this year's report saw effective rent increases and total rent increases. For two-thirds of the markets, the effective rent increases were 5% or more, although a handful of markets—among them, San Diego, Dallas, Miami and Washington, DC—saw increases of less than 5%. Meanwhile, operating expenses ticked up slightly overall, while remaining flat or declining in a handful of markets.

Base rents were up 11.4% nationwide from 2013 to $37.45, while the unweighted average rose 12% to $27.02. On balance, the value of concessions declined relative to rents, although still cutting into landlords' bottom lines, according to Savills Studley.

What's most definitely on the upswing is landlord effective rents, which rose 14.9% last year, or more than four times the average year-over-year gains of 3.3% for each of the preceding two years. Leading the way in this regard were San Francisco (up 27.1% Y-O-Y) and West Los Angeles, although some markets posted even bigger gains from a smaller base. Notably, Philadelphia (up 61.3%), Atlanta (42.4%), Northern New Jersey (33.6%), Chicago (32%) and Downtown Los Angeles (17.5%) registered their first significant Y-O-Y landlord effective rental rate growth of this cycle.

Philadelphia is among three markets in which landlord effective rent has pushed above the pre-recession peak, with the others being Denver and Houston. However, landlord effective rent overall is still 32.9% below its 2007 peak of $32.90.

Moreover, it has grown more slowly than it did during the previous cycle. Between 2003 and '07, landlord effective rent nearly doubled. This time around, the growth between 2010 and last year was more on the order of 55%, rising from $14.72 to $22.86.

Rents did not increase in a vacuum, and the 2015 SERI report charts a number of factors that set the stage for rent growth—and which look likely to prevail this year as well. The report notes that amid the strongest stretch of hiring since3 1999, office-using sectors ended 2014 with 1.0 million jobs more than at the pre-recession peak. For the first time since '07, “positive news about job growth, improving household consumption and corporate profits dominated headlines as crises such as Eurodebt, the fiscal cliff and taper tantrum dissipated,” the report states.

Another factor in favor of rent increases was the spread of leasing recovery to previously lagging markets last year. “A key difference in '14 was the turnaround in markets such as Downtown Los Angeles and Chicago. These CBDs were limping along in 2012 and 2013, but during 2014 stronger demand started to make a dent in availability.” Meanwhile, tech markets maintained what the SER report terms a “frenetic” pace of leasing activity.

Last but certainly not least, the report notes that strong investment sales influenced how leases were structured in many markets. “Landlords considering the sale of a building were less willing to budge on taking rent but were flexible in terms of concessions, particularly with creditworthy tenants who committed to long-term leases.”